CoC Cannot Bypass NCLAT Directions On Potential Resolution Applicant Eligibility: NCLT Mumbai

The Mumbai Bench of the National Company Law Tribunal on 13 April held that the Committee of Creditors (CoC) cannot bypass binding directions issued by the NCLAT regarding relaxation of eligibility criteria for potential resolution applicants (PRAs) in the corporate insolvency resolution process (CIRP). The Bench comprising Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan further clarified that resolution applicants may revise their financial offers upwards, but shall not...

Distribution During CIRP Must Conform To Section 30(2) Of IBC: NCLT Mumbai

The Mumbai Bench of the National Company Law Tribunal (NCLT) on 6 April held that it cannot use its inherent powers under Rule 11 of the NCLT Rules, 2016 to allow distribution of sale proceeds during the Corporate Insolvency Resolution Process (CIRP) without complying with Section 30(2) of the Insolvency and Bankruptcy Code (IBC). A Bench comprising Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar rejected the Resolution Professional's plea in the CIRP of Arshiya...

NCLT Kochi Admits IMOST To Insolvency, Says International Reputation Concerns No Bar Once Default Proven

The National Company Law Tribunal (NCLT) at Kochi has admitted an insolvency petition filed by Axis Bank Limited to initiate the Corporate Insolvency Resolution Process against IMOST Academy (India) Private Limited, holding that once debt and default are established, objections based on reputational impact cannot defeat admission. A coram of Judicial Member Vinay Goel rejected the academy's contention that initiation of CIRP would adversely affect its international standing. “If the insolvency...

NCLT Kochi Records Interim Payment Plan To Ensure Access To Jatayupara Tourism Project

The National Company Law Tribunal (NCLT), Kochi Bench, has recently recorded and accepted an interim arrangement for payment of dues to a landowner to ensure uninterrupted access and continued operation of the Jatayupara Tourism Project (JTP), noting that denial of access would render the project unusable. The order was passed by Judicial Member Vinay Goel on an application filed by an NCLT-appointed Chartered Accountant assigned, pursuant to directions of the Supreme Court, to verify and...

Inadvertent Email to Bidder Not A Breach Of Confidentiality: NCLT Indore Dismisses Plea Against Tax Officials

The National Company Law Tribunal (NCLT), Indore Bench, has dismissed a plea by the liquidator of Girdharilal Sugar & Allied Industries Limited seeking action against Commercial Tax Department officials for allegedly sharing details of a Stakeholders' Consultation Committee (SCC) meeting with a prospective bidder via email, holding that the inclusion was inadvertent and caused no prejudice. “In continuation thereof, it is of the considered view that a singular and isolated instance of...

Automated Set-Off Of Income Tax Refunds During Moratorium Violates IBC: NCLT Indore

The National Company Law Tribunal (NCLT) at Indore recently held that even automated adjustment of income tax refunds during the IBC moratorium is illegal, directing the Income Tax Department to refund Rs 30.16 lakh set off against pre-CIRP tax dues of Sanwaria Consumer Limited. “The mere fact that the adjustment was effected through an automated or system-driven process does not alter its legal character. The effect of the action remains the same, namely recovery of pre-CIRP dues during the...

NCLT Kolkata Refuses To Exclude Stay Period For Liquidator's Fee Calculation Amid Misconduct Allegations

The National Company Law Tribunal (NCLT) at Kolkata has refused to exclude, for the purpose of computing a liquidator's fee, the period during which the liquidation process was affected by appellate orders, holding that such benefit cannot be granted where the delay is linked to disputes over the liquidator's conductA coram of Judicial Member Labh Singh and Technical Member Rekha Kantilal Shah said, “In our view, if any dispute arises due to misconduct of the liquidator, resulting in litigation...

Homebuyers With RERA Refund Orders Still 'Allottees', Must Meet IBC Threshold: NCLT Chennai

The National Company Law Tribunal (NCLT) at Chennai has held that homebuyers who have obtained refund orders from RERA cannot be treated differently from other allottees for initiating insolvency proceedings, ruling that all such buyers must meet the collective threshold under the Insolvency and Bankruptcy Code. “The allottee even after the order of RERA directing for refund by the Corporate Debtor continues to be allottee and has to mandatorily comply with Section 7 (1) 2nd Proviso. The Home...

Suspended Director Cannot Reopen CIRP Process After Repeated Eligibility Defaults: NCLT Bengaluru

The Bengaluru Bench of the National Company Law Tribunal (NCLT) on 6 April, refused to permit a suspended director of a corporate debtor to submit a resolution plan at a belated stage after he repeatedly failed to satisfy eligibility conditions under the Corporate Insolvency Resolution Process (CIRP), reiterating the strict time-bound framework under the Insolvency and Bankruptcy Code, 2016. A Bench comprising Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada...

Subsequent Demand Notices Cannot Create Fresh Cause Of Action Against Personal Guarantor: NCLT Mumbai

On 23 April, the Mumbai Bench of the National Company Law Tribunal (NCLT) held that subsequent demand notices issued to a personal guarantor do not give rise to a fresh cause of action for initiating proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016, and that limitation must be computed from the first invocation of the guarantee.Section 95 deals with the initiation of insolvency resolution process against a personal guarantor to a corporate debtor.A Bench comprising...

Limitation Against Personal Guarantor Starts From Guarantee Invocation, Not Corporate Default: NCLT Kolkata

The National Company Law Tribunal (NCLT), Kolkata Bench, has reiterated that the limitation period for initiating insolvency proceedings against a personal guarantor runs from the date of invocation of the guarantee and not from the date of default of the corporate debtor. The bench of Judicial Member Bidisha Banerjee and Technical Member Rekha Kantilal Shah observed, “We rely on the judgment of the Hon'ble Supreme Court, in Civil Appeal No. 6894 of 1997 (Syndicate Bank vs. Channaverappa Beleri...

NCLT Mumbai Approves Rs. 730 Crore Resolution Plan For Rajesh Business And Leisure Hotels

The National Company Law Tribunal (NCLT) in Mumbai has approved a Rs. 730 crore resolution plan for Rajesh Business and Leisure Hotels Pvt Ltd, submitted by a consortium of Rare Asset Reconstruction Limited and Check-Inn Hotels Pvt Ltd. A bench of Judicial Member Ashish Kalia and Technical Member Sanjiv Dutt was dealing with an application filed by the resolution professional seeking approval of the plan, which had been cleared with a 100% voting share of the committee of creditors. The...